Chile implements National Reconstruction Law to impact real estate market

The National Reconstruction and Economic and Social Development Law has entered into force in Chile, introducing new incentives for the real estate market. A key component of the law is a temporary VAT exemption on the first sale of newly completed homes, scheduled to begin on December 1, 2026, for a period of one year.

While the measure aims to boost the sale of available housing stock, experts note that property prices may not automatically drop by the 19% VAT rate. The Chilean Chamber of Construction estimates the actual savings passed to buyers could range between 2% and 7%, due to factors such as accumulated tax credits during project development.

The law also introduces a special taxation regime for rentals. However, analysts suggest that price reductions alone may not resolve housing access issues, as many families remain constrained by bank requirements regarding income, debt levels, and repayment capacity, as well as variables like the Consolidated Debt Registry (REDEC).